As the chart shows, a net long position held in gold futures by Money Managers was reduced by 64 thousand contracts in just one week!
What is more, it was the highest reduction in a net long position in history. Simply put, suddenly the gold traders threw in the towel. In my opinion, it looks like a panic and, as usually, panics create buying opportunities.
The red rectangle points to other sudden and big reductions in net long positions held by Money Managers. Each time there was such a drop the prices of gold were recovering.
Last week this change was the highest in history (the blue circle) so the chances for a short move up are relatively high.
I have not written about gold on this blog for quite a long time but believe me - I was not optimistic about the yellow metal. Now I am getting optimistic, at least in the short term.